Fiat Chrysler Automobiles has received a 10-year tax abatement on its planned investment of nearly $400 million to expand and equip Indiana Transmission Plant II to manufacture a new engine.
The Kokomo Common Council Monday unanimously voted to approve the abatement, which is a 10-year step-down abatement, starting at 100% in the first year and lowering by 10% each subsequent year.
In order to keep the abatement in place, FCA has committed to retaining 942 employees and hiring 125 new workers. State documents show the total salary of the new hires would total $10.1 million.
The company must also make a capital expenditure on the project that totals at least $338 million in new equipment and $56.6 million in real estate improvements.
Documents outlining the proposed project note the total estimated values of manufacturing equipment will jump to $1.3 billion in cost and roughly $373 million in assessed value.
Real property totals will improve to $236.4 million in cost and $58.4 million in assessed value.
The local tax abatements join a slew of other, state-level incentives offered to FCA, including incentives related to job training; performance-based tax credits hinged on whether the company hires Hoosiers; redevelopment credits meant to incentivize work on vacant property; and more.
FCA’s investment will allow for the assembly of the GMET4 engine at the Kokomo plant, marking the first time the company has built an engine in Indiana.
Kokomo Mayor Tyler Moore said in previous interview that the “local incentive, combined with the incentives provided by the state, are what allowed FCA to make the decision to invest in Kokomo, rather than outside the state.”
The council also approved to resolutions allowing for the establishment of an Economic Revitalization Area (ERA), which must be established before an abatement can be granted.